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Steve Patiuca sat down with US and Lisa Lane's in and guys apart from sports.
Okay, hold on a second, but you've been talking about Atalanta for like about three years now, and you're so excited, and I know that the whole thing is going to be about Atlanta, and.
I think that that's wonderful.
But a lot of tules in a lot of places.
Really, you're going to do.
This in the capital private equity senior Advice that joins US now three wind Steve, Hello, good to see you.
Great to be here.
Let's start with sports.
I thought it was in ESPN.
We had to get on to night because that's Atlanta five NOL. What a story for that team this year.
You know, I'm still pinching myself. It's just incredible and very happy for the team and the coach and the Percossi family. It's it's been great for Bergamo and Milan and it's just really exciting.
I don't need to get too excited, but can you win the league this year?
You know the old adage take it one game at a time, so we just we've got to do We've got to get healthy. We got a couple of guys that are hurt, but they're playing fantastic.
It's amazing to see Barcelona up next and maybe straight qualification. So the not the next round, but the one after that, right.
Big that would be a big big for European would go to Barcelona. That's the football.
Okay, I did the basketball. You should do best.
Actually, there's a lot of.
So reports that you're after majority ownership of the Boston Celtics. How much can you tell us this morning?
I can't comment, as you know, on any deals, including.
That deal, okay that one specifically? Can we talk more broadly about the NBA franchises and what's happening there, because I have noticed that audience levels TV audience levels have fallen off in some parts. What do you think is behind that?
You know, I think I think it's fragmentation of viewing, and I think the viewing leaderships are really good when they can count it correctly and really find out who's watching where. So I don't think there's a concern there in the league is really strong and has more stars than ever, and you know, it's been fantastic, so I think that's a that's kind of a bump in the room.
So we've covered football, we've covered basketball, any other sports that you're going to buy a team in.
No, I'm not in a cricket so I'm good.
But there's actually a lot to talk about it and whether you're going to buy another team? Are you going to buy another team?
Who knows?
Okay, all right, well let's move on because right now we talk about Davos and Hall has been dominated by incredible optimism. America is going to boom and Donald Trump what's he going to do? Of course there's also overlay of artificial intelligence. What's been your biggest takeaway about what people are concerned about with the Trump administration?
Well, I think first of all, this this Davos is all Trump, all AI. That's all people are talking about. And the Trump issue is, you know, what's going to happen with tariffs? You know, you're worried about tariffs? Is worried about tariffs, What's going to happen with the Ukraine, What's going to happen with the American economy and protectionism? That's that's their worry. And on AI, you know, AI is for real. It feels a little bit like you're
in nineteen ninety nine Internet boom. So there's a lot of hype, but there's a lot of reality in AI, and AI is going to change everything. I view AI as almost building the railroads and the interstate highway system in the US. We're going to need to have that over the next twenty years or we're going to fall behind. So I think it's a legitimate discussion on AI. And they came out with the Stargate program, which I think
is fantastic because other countries are getting ahead. China's investing billions, Ue is investing billions, Saudia's investing billions. I think the US has to get out ahead of that trend and it's going to affect everything over the next twenties. I'm really excited about it.
As an investor. What's your approach to one of this? How do you think about the opportunities you mentioned the late nineties, it took a while to find out who the ultimate winners would be. Are you expecting something similar this time around?
It's going to be a little different because I look at AID, you had winners like Google that were kind of natural monopolies. There can be many variant of large language models, so there can be a global large language model. There can be probably four or five of those. But now the real use is going to be vertical ones, so tailoring models with the data specific data for say healthcare specific models for transportation with transportation data in it.
So I think vertical AI models will be the ones that start to impact the economy, and then the other ones are going to grow and we need that infrastructure, and then what's going to happen is from that you need power. Fusion is being talked about and is around the corner. All the fusion companies I look at are
getting close to actually generating energy. The models are showing soon they're going to generate energy and build these large tokmacs that's going to have to power all the centers with all to get as the GPUs, because if you look at the power users of AI, it could be
the entire power right now in the United States. So I think this stargate program or program like it is needed and we've got to match those other countries, and that is going to create a virtual sloop of spending building the infrastructure and be great for America and a revolutionized healthcare.
Healthcare as well, I know that you've been very active in that space, in particular, particularly in the speed that it will take to put new prescription drugs on the market using different machine learning techniques. I'm just wondering, is that your main focus right now of investment when it comes to AI the other regions that you think are promising in the application in the near term, not just so there's these.
Long term goals. Well, I'm focused on the health directs. I think that's the number one. But it'll be helpful in energy and finding energy and processing energy. It'll be helpful in transportation, It'll be helpful. It's going to be embedded in every business. And I think like liquid I, AI were for invested in that doesn't require it's built. As we talked about last year, they studied a worm's brain in mid like, who would do that? There's three
hundred neurons in a worm's brain. I think that's fine. I mean neurons do you think is in your brain? Three hundred and one? I'm just kidding. The average person has eighty six billion. You guys probably have eighty seven each. But you can come on again. If they come out with an AI system that requires eighty percent less power to load it, and that means you can put it on edge device, so to be on your phone. So you're going to have, you know, your assistant on your phone.
This is going to start to be in all the phones. It's going to kind of revolutionize the way our lives are.
One aspect of this Davos is so interesting is that there's some real tensions to be resolved, especially as everyone's talking about artificial intelligence. On the flip side, Donald Trump talking about national security. He's talking about the chips in the US that could potentially transmit data back to China or one of our other adversaries or competitors. And I'm just wondering as an investor, how you understand what's national security and what isn't.
Well, it's difficult. You got to follow the government and it changes all the time. I think in general, we do need national security, but it has to be focused, it has to have a purpose, and hopefully they'll have rational people that decide, you know what that is.
Do you worry that some voices we'll get a biggest site in the future in the private sector.
No, I don't worry because we have a system that I think will work in the long term, and there's going to be a lot off. There always has been fighting of different companies for different things, and so we'll get through it and hopefully we'll do the right thing. We've got to Congress, We've we've got the court system show in the United States is very stable. So I do think we need cybersecurity and we need security in general. Hopefully we can have a datante with China so we
don't have that going on. And I think Trump, you know, wants to cut deals, you know, to move the economy forward, and I think that'll be a good thing.
I'm showing a lot of Europeans have asked you on your opinion on what the next four years it's going to look like. What have you tell the Europeans when you ask that question?
You know, I think the next four years the Europeans, I've been in many meetings here with health ministers and all sorts of ministers, and what they say is the EU really isn't a full union. They use the same money, but there's not an integrated capital market. There's not integrated in anything. In terms of starting a business, you need to fill out, you know, one hundred pages of forums
in Germany and different ones in Portugal. So many of them talk to me and say they need to create a twenty eighth state with a set of rules, a virtual state with one set of rules to start a business and one set of of a bankruptcy. Bankruptcy is different in every country. You can't have a great capital market if you're dealing with twenty seven different bankruptcy kills
or twenty different ways of doing things. So I think it's a great idea to start a twenty eighth virtual European state, and businesses can opt to be in that or being one of the twenty seven. But it's hard to be in both of those at the same time. So the big advantage the US as is it is one market. It is as one set of regulations, so we have a leg up and hopefully we will make that even better in the next four years.
I want a return to where we began, which is sports, and my sport.
Which is auctions.
I'm looking at bond auctions, which I think is like a R caught it time. Well, I know, hold on a second, No, I'm serious, because I wonder how much you're watching what so many people here are worried about, which is that all of this optimism, all of this you know, happy talk about getting together and really focusing on growth could get really stein made if you start to see bond yields climb and you start to see the fiscal pressures really come into play. How concerned are you about that.
I'm very concerned. You know, all the data would show when you have an increase in the money supply as big as it's been in the last five years and a large deficit, that's going to cause higher interest rates and inflation. Those kind of go hand in hand. So my biggest worry is inflation going to get out of control and keep those interests up there. I think house mortgages are costing seven percent. We definitely have to increase the supply and they're looking at programs to do that.
But with seven percent mortgages, that's not great for growth.
You mentioned nineteen ninety nine, and we all know what happened after nineteen ninety nine, and there is this feeling that there needs to be a washout and some of the startup companies to say deal with technology that continues to evolve. Is that the big concern that this kind of increase in rates could really catalyze that kind of washout. Is that what you're keeping your eye on.
Increase in rates definitely catalyzes washouts because when money is free, there are no washouts. Right, we had free money for a long period time. Now. The good news is for most of my life, too long life, most of my life, regist rates have been t bills have been five percent, five and a half percent, So it's not anomalist. But yeah, that is the fear. We've already seen a lot of the company's valuations go down a good white boats, So
I think we're kind of through that. I think there is a lot of hype on AI and probably some some fundings at very high levels. But I don't I don't. I don't see it like it was in ninety nine, where everything across the board was crazy. I used to walk into a room in San Francisco. They give me a term sheet and they say, we have a company that's going to internet. Company is going to reduce the supply chain cost of medical equipment. That we're valuing the
company at one hundred million and has no revenues. This is the idea, and you have two hours to decide do you want to invest ten million, one hundred million valuation. I'll pass. I was, I was fall out of my chair. This is a real story. I said, thank you very much. And nine and ninety nine of those went bankrupt, and then we had Google and a few other ones that did well. That's not that's not the situation we're in right now.
Stay you know, John, It's going to say great to see you, good luck to all your sports teams. As we say for without a doubt, Steve Palu can Bank Capital and Force of Milian